Should a team hiring a consultancy firm that specializes in bankruptcy cases be signing the likes of Ronny Cedeno to a $1.2 million contract? Compared to Roger Cedeno, he’s got to be a bargain, though not specifically the sort of cost-cutting measure recommended by the geeks at CRG Partners, a firm the New York Times’ Ken Belson admits, might be of some service (“it is not unreasonable for Fred Wilpon and Saul Katz to at least explore ways to restructure their team’s balance sheet”)
The hiring of the firm, at minimum, suggests that the Mets have reached a new moment of need — for money, or for advice, or for some kind of re-engineering of the operation. For more than a year, the team has been looking for ways to slash costs and to raise cash as it has hemorrhaged losses, fully exhausted its line of credit with Major League Baseball and, just last month, obtained a $40 million “bridge loan” to keep operating while the club’s owners solicit new investors.
Turnaround specialists like CRG rarely win popularity contests. That’s because they help companies reduce expenses by taking unsavory steps like closing stores, shuttering factories, laying off workers and asking lenders to write off some of their clients’ debts.
When turnarounds succeed, companies come out leaner and arguably healthier. CRG, for instance, was the chief restructuring officer for Pilgrim’s Pride Corporation, one of the world’s largest chicken producers. Processing plants were closed, workers laid off and finances restructured, allowing Pilgrim’s Pride to emerge from bankruptcy protection in less than 13 months.
“CRG helped guide us through a very difficult financial time,” said Don Jackson, the former chief executive officer of Pilgrim’s Pride, who now has the same title with JBS USA, majority owner of Pilgrim’s. “The result: New ownership. New financing. New management. A new approach.”
Yes, it’s all good times and big smiles in the midst of a restructuring. The advent of the Shake Shack’s “Flip Your Own Burger” scheme should yield tremendous savings, along with the installation of pay toilets. The Amazins’ sickly bottom line will also receive a boost from voiding R.A. Dickey’s contract the introduction of the Kevin Burkhardt Kissing Booth.